Hanwha Engine (082740) Q4 2024 earnings summary

Executive summary

• FY24 sales rose 41% YoY to KRW 1.2T, with operating profit of KRW 71.5B and a 6% operating margin, up 5 percentage points YoY.

• Improved profitability reflected higher deliveries of normal-margin engine orders contracted from 2022 and fewer low-margin pre-2022 orders.

• FY24 new orders increased KRW 405B YoY to KRW 1,649B; year-end backlog reached KRW 3,384B.

Financial highlights

• FY24 sales were KRW 1,202B versus KRW 854B in FY23; operating profit was KRW 72B versus KRW 9B.

• Pretax profit was KRW 77B versus a KRW 0.9B loss; net profit was KRW 79B versus a KRW 0.4B loss.

• Cost of sales fell to 90.3% of sales from 94.9% in FY23, a 4.6 percentage-point improvement.

• FY24 new orders rose 33% YoY to KRW 1,649B, including KRW 1,315B of dual-fuel engine orders.

Outlook and guidance

• FY25 order volume is expected to be similar to FY24 levels.

• Clarkson's Sep. 2024 forecast put the 2025–2033 average global shipbuilding order volume at 46.8M CGT.